On October 25, 2011, the Obama Administration proposed a Pay-As-You-Earn plan that would cap certain student loan borrowers’ loan payments at 10% of their discretionary income. Under this proposal, borrowers paying under the Pay-As-You-Earn plan would also be eligible to have their remaining loan balance forgiven after making 20 years of payments.
Details of the Pay-As-You-Earn plan, including borrower and loan eligibility, will not be finalized until the proposal goes through the negotiated-rulemaking process. View the Administration’s fact sheet about this initiative.
